New Tax Regime for British Online Casinos

The online gambling market in the United Kingdom represents one of the largest gambling markets in the European Union. Lawmakers in Britain have proposed a new law on online gambling in the country and this new modification will be implemented starting with December 2014. Recently, a research firm has published some numbers on UK online gambling taxation representing the amount the British Treasury could collect in 2015 for a full year of operation.

The starting point for these figures is the prediction that the United Kingdom online gaming market will be worth £2.74 billion by 2015. The research firm has assumed for its principal calculation the present proposed rate of tax of 15%. Based on the fact that the rate of compliance will be 92.5%, the UK Treasury should collect up to £385.7 million as tax on online gambling in 2015. Should a tax rate of 20% will be settled after the discussions, the Treasury could collect a windfall amount of £514 million. But online casino operators have not agreed to these levels of taxation. The online gambling industry in the UK is opposing the tax rate of 15% and warned lawmakers that this high rate of tax would lead to a higher rate of non-compliance. The preferred rate by the industry for the Point on Consumption tax is 10%. In the eventuality that this level is accepted and with 100% market compliance, the research firm has worked out that the tax revenue will be £274 million.

Analyst of the online casino gambling market in the UK are not confident that the numbers regarding the predicted worth of the market are real. Many of them believe that the Point of Consumption tax will accelerate the current trend of fewer online gambling operators in the country. Also, observers of the United Kingdom online gambling industry stated that the increase in the net gaming revenue are likely to be moderate and in the worst case could even reverse. Besides that, online casino companies could decide to exit from the British market fearing that high taxes would affect the viability of their online casino businesses.